May 13, 2009, Introduced by Reps. Melton, Ball, Corriveau, Coulouris, Simpson, Haugh, Young, Lipton, Marleau, Mayes, Scripps and Meadows and referred to the Committee on Health Policy.
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 3711 (MCL 500.3711), as added by 2003 PA 88,
and by adding section 3710.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3710. Notwithstanding any other provision of this act, a
health benefit plan shall not be rescinded, canceled, or limited
due to the plan's failure to complete medical underwriting and
resolve all reasonable questions arising from the written
information submitted on or with an application before issuing the
plan's contract. This section does not limit a health benefit
plan's remedies upon a showing of intentional misrepresentation of
material fact.
Sec. 3711. (1) Except as provided in this section, a small
employer carrier that offers health coverage in the small employer
group market in connection with a health benefit plan shall renew
or continue in force that plan at the option of the small employer
or sole proprietor at a premium rate that does not take into
account the claims experience or any change in the health status of
any covered person that occurred after the initial issuance of the
health benefit plan.
(2) Guaranteed renewal under subsection (1) is not required in
cases of: fraud or intentional misrepresentation of the small
employer or, for coverage of an insured individual, fraud or
misrepresentation by the insured individual or the individual's
representative; lack of payment; noncompliance with minimum
participation requirements; if the small employer carrier no longer
offers that particular type of coverage in the market; or if the
sole proprietor or small employer moves outside the geographic
area.